FLY Leasing reports Q2 results; acquires five aircraft

By admin
July 28, 2016 20:01

During the second quarter of 2016, FLY Leasing has reported net income of $4.7 million, or $0.14 per share. Net income for the six months ended June 30, 2016 was $11.8 million, or $0.35 per share. For the same six month period in 2015, there was a restated net loss of $23.8 million, or $0.59 per share. Adjusted net income was $15 million, or $0.45 per share, for the quarter, which compares to a restated net loss of $43.7 million, or $1.06 per share, for the same period in 2015. For the six months ended June 30, 2016, adjusted net income was $31.4 million, or $0.93 per share, compared to $42.6 million, or $1.03 per share, in 2015.

During the quarter, FLY acquired one new aircraft and five aircraft in July. The lessor also announced a new $75 million share repurchase program

“We continue to rejuvenate our fleet through the sale of older aircraft and their replacement with newer models,” said Colm Barrington, CEO of FLY. “In the second quarter we sold six aircraft with an average age of 18 years and so far this year, we have purchased six aircraft with an average age of approximately two years. We will continue with our strategy of selling older aircraft opportunistically and purchasing newer models prudently. In addition to actively managing our portfolio, we see good value in our shares which trade at a significant discount to book value. Yesterday we approved a new $75 million share repurchase program.”

“FLY remains in a strong position to achieve its strategic objectives with $382 million in unrestricted cash and the capacity to acquire up to $2 billion worth of aircraft,” added Barrington. “Our fleet is 100% utilized and we continue to see excellent demand for leased aircraft.”

FLY has repurchased approximately 20% of its shares since September 30, 2015 for $106.2 million. Subsequent to quarter end, FLY approved a new $75 million share repurchase program to replace its previously authorized $30 million program. There were 33.3 million shares outstanding at quarter end.

At June 30, 2016, FLY’s total assets were $3.2 billion, including investment in flight equipment totaling $2.7 billion.

Cash and cash equivalents at June 30, 2016 totaled $476.9 million, of which $382.1 million was unrestricted. In addition, FLY had eight unencumbered aircraft with a net book value of $531.8 million. The net book value per share at June 30, 2016 was $18.97. At June 30, 2016, FLY’s 76 aircraft were on lease to 43 airlines in 29 countries. The average age of the portfolio, weighted by net book value, was 6.8 years. The average remaining lease term was 6.3 years, also weighted by net book value.

At June 30, 2016, FLY Leasing’s fleet was 100% utilized and the 76 aircraft were generating annualized rental revenue of approximately $293 million.

FLY Leasing has also recently purchased five aircraft. Three 787-8s were purchased in a sale and leaseback transaction with a leading flag carrier. The aircraft are on 12-year leases. In addition, FLY purchased two Boeing 737-800 aircraft from a South American airline, which it has leased to a leading Asian carrier on six-year leases.

“FLY now has four B787s, which is Boeing’s newest and most modern aircraft and is flown by leading airlines globally,” said Barrington. “We also continue to add to our fleet of B737-800s, which is a workhorse of the global airline industry and has maintained its strong value. As we continue to execute on our fleet rejuvenation, our fleet metrics and profitability will continue to improve. Our robust liquidity position and nimble approach to aircraft acquisitions provides us with the financial flexibility to deploy our resources opportunistically to enhance stakeholder returns.”